Cao criticizes FEMA delay in forgiving disaster loans

The Federal Emergency Management Agency received praise Tuesday for unclogging some long overdue disaster assistance, but Rep. Anh "Joseph" Cao, R-New Orleans, said there still is an "inexplicable delay" in forgiving tens of millions of dollars in disaster loans.

Cao said that by federal statute, FEMA should forgive the loans if three fiscal years after a disaster strikes local governments still are in such dire financial condition that local revenue is insufficient to meet their operating budgets.

It's been four years since Hurricane Katrina struck, and New Orleans clearly lacks the resources to repay the disaster loans, Cao said at a hearing by the House Subcommittee on Economic Development, Public Buildings and Emergency Management.

David Garratt, FEMA's acting deputy administrator, told Cao every government entity that meets the federal criteria will have its loans forgiven and he promised the congressman and panel Chairwoman Eleanor Holmes Norton, D-D.C., an update soon.

Cao expressed concern about reports FEMA is cutting staff at the Louisiana Transitional Recovery Office in New Orleans. But Charles Axton, another FEMA official who testified at the hearing, said cutbacks do not involve staff working on reducing the backlog of Hurricane Katrina related claims.

During the hearing, Paul Rainwater, executive director of the Louisiana Recovery Authority, joined Cao in praising the new management team installed by the Obama administration for obligating more than $1 billion in hurricane recovery financing, much of which had been stalled for years.

"I want to give credit where credit is due, " said Rainwater, praising a new "cooperative" attitude that has FEMA working directly with the state of Louisiana and local governments to move stalled rebuilding projects.

Craig Taffaro Jr., president of St. Bernard Parish, concurred, but said that projects in his parish are being slowed because FEMA doesn't have enough personnel to prepare the detailed work orders required for projects, even after they are approved by FEMA officials.

He also complained that FEMA sometimes delays projects by insisting on hiring its own engineers and architects to review work done by state and local engineers and architects, a process he called costly and time-consuming.

Norton said it would seem that this "extra layer" of bureaucracy can be stripped from the process, expressing frustration that despite progress there are still delays in pushing funding through the bureaucracy. It just adds to the misery of residents still waiting for their own personal signs of recovery, Norton said.

"I don't know whether to cry now or after the hearing, " she said.

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Bruce Alpert can be reached at balpert@timespicayune.com or 202.383.7861.